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Investment in commercial real estate: prospects suggest an upward trend for 2025

Miguel Sena • 26/03/2025

Cushman & Wakefield anticipates an 8% increase in the volume of commercial real estate investment in 2025, with an estimated total of €2.56 billion.

Cushman & Wakefield presents the 44th edition of Marketbeat Portugal (Spring 2025), where it analyses the market evolution in 2024 and anticipates key trends for this year. The projections for 2025 suggest the continuation of growth in commercial real estate investment, with an estimated increase of 8% compared to 2024.

"The real estate market demonstrated resilience in 2024, with a significant rise in transaction volume and strong contributions from foreign capital. For 2025, we anticipate more sustained growth, driven by a context of greater macroeconomic stability, namely through the gradual reduction of interest rates, which will favour the resumption of transactional activity. The convergence between buyer and seller expectations should stimulate the market, while the compression of prime yields, already observed in the retail sector, may extend to other asset classes, keeping international investors interested," comments Cushman & Wakefield's Managing Director in Portugal, Eric van Leuven.

The distribution of capital invested in 2024 (€2.38 billion, according to data collected by Cushman & Wakefield) confirmed the recovery of the retail sector, which accounted for half of the total transaction volume. The hospitality and office sectors followed, with a share of 21% and 14%, respectively. Alternative assets also consolidated their presence in the market in 2024, representing 11% of the total investment volume, with a notable emphasis on student accommodation.

Foreign capital, which represented over 70% of total investment in 2024, is expected to continue playing a crucial role, with international investors maintaining strong interest in Portugal's real estate market. The majority of international capital originated in Europe, with the French and Spanish markets jointly accounting for half of the foreign volume.

Across all sectors, 2024 was also a year of consolidation for sustainability and the integration of Environmental, Social, and Governance (ESG) criteria into decision-making processes within the national real estate market. In the Portuguese market, notably within banking, different interest rates are already applied to financing depending on the sustainability of the investment. In 2025, ESG trends in real estate will focus on decarbonisation, climate adaptation, financial transparency, and biodiversity preservation.

"The real estate sector finds itself at the centre of profound transformation, driven by stringent regulatory demands and the growing demand for sustainable buildings aligned with ESG practices. The integration of these criteria into investment decisions has become a strategic imperative for 2025, with ESG investment funds gaining prominence and attracting significant capital. These trends reflect a structural change in the sector, where sustainability is no longer optional but an essential requirement for competitiveness and economic success in the medium to long term," emphasises Eric van Leuven.

In terms of sustainable building certifications, namely BREEAM and LEED, the number of certifications issued in 2024 almost tripled compared to the total certifications issued the previous year, with prevalence in the office and retail sectors.

Regarding WELL certification, focused on building usage and occupant well-being, five distinctions were issued nationally in 2024, all in office buildings. This sector continues to dominate future certification, with nearly 60 buildings registered.

Below is a summary of the key trends set to shape occupational markets in 2025.

 

Occupational Markets

 

Retail 

In 2025, location will continue to be the decisive factor in brand expansion, with a strong focus on tourist and business urban centres. The competition for prime spaces is driving up rents, reflecting brands’ willingness to invest in strategic positioning. At the same time, brands with purpose, incorporating sustainable practices and social responsibility, are increasingly valued to strengthen connections with consumers. Flagship stores are investing in automation and integration between physical and digital channels, optimising operations and improving customer experience. The athleisure segment remains in robust growth, with brands diversifying offerings to meet demand for comfortable, functional fashion.


Offices 

The office market in 2025 will continue to be shaped by well-being and ESG criteria, with companies prioritising certified buildings. Flexibility in occupation and preference for flex offices are gaining prominence, as companies seek more attractive hubs to retain talent. The scarcity of qualified supply in Lisbon and Porto is expected to push up prime rents, as significant new supply is only anticipated for 2027/2028. More structured contracts, with long terms and intermediate exit options, are becoming a trend to ensure stability and cost optimisation.


Hospitality 

The hospitality sector will continue to expand with the diversification of international operators, especially in full-service and luxury segments, and the growth of serviced apartments for longer stays. Tourism bolsters its competitiveness through experiences focused on nature, gastronomy, and culture. The North American market gains relevance, while the Asian market retains high growth potential. In investment terms, a rise in transactions is expected, including portfolio sales and operational platforms, with investors willing to pay premiums for projects aligned with ESG policies.

Industrial and Logistics 

The industrial and logistics sector will be driven by operational optimisation, with companies migrating to more modern and efficient spaces, anticipating medium/long-term growth. Nearshoring will continue to gain momentum, boosting demand for industrial units and warehouses, particularly in the green energy sector. The lack of qualified supply keeps demand high for modern and sustainable assets, focusing on efficiency, ESG, and functionalities that improve operation and talent retention. The self-storage and data centre segments are expanding, benefiting from adapting existing buildings and land, as well as Portugal's strategic advantages in the technology sector.

The full report can be consulted here.
 

About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture.  For additional information, visit www.cushmanwakefield.com.

Media Contact

Miguel Sena
Miguel Sena

Associate Director, Head of Marketing & Communications • Lisbon

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